In a boost to the Newcastle CBD, AMP Capital has snapped up the Marketown​ Shopping Centre, for $163 million, on behalf of its client, Sunsuper.
It comes at time when retail sales are showing improvement, particularly for malls that offer larger food courts and are not as reliant on the less-performing department stores.
![Marketown shopping centre on Steel Street, Newcastle West, has been sold to AMP for $163 million.](http://web.archive.org./web/20170710034610im_/https://www.fairfaxstatic.com.au/content/dam/images/g/x/6/l/d/9/image.related.articleLeadwide.620x349.gx6lmw.png/1499397367425.jpg)
It was sold by the private Sydney-based Cartier Group, which is associated with developer, David Boyer. Mr Boyer's other sales in recent years include the Pacific Square Shopping Centre in Maroubra, Sydney, for $137 million to Charter Hall Group.
Marketown Shopping Centre is a 26,000-square-metre sub-regional centre, which spans two separate sites and has undergone redevelopment as part of the expanding Newcastle City zone. It is anchored by Coles, Woolworths, Big W, Officeworks and Dan Murphy's and has 58 specialty stores.
According to the latest retail data, annual growth rates were up to 3.82 per cent year on year, in May while April sales were revised higher to 3.11 per cent from 3.08 per cent previously.
Investors are flocking to shopping centres with close to $1 billion changing hands in the past year. AMP Capital's Shopping Centre Fund has also been suggested as an interested party in the Blackstone retail platform, worth about $3.5 billion, with final bids due on Monday, July 10.
JLL's director, sales & investments NSW, David Mathews, said the long-term leases to major national retailers offer stability and defensiveness, which investors are seeking at present.
"The non-discretionary aspect of the assets ensures low volatility of the trading profile, moving annual turnover, and the yields in the neighbourhood sector remain attractive in the current low-yield environment," Mr Mathews said.
AMP Capital's head of separate accounts, John Dynon, said the AMP was "delighted to have found an opportunity for Sunsuper to invest in Newcastle that meets this objective, helps our client to achieve their goals, and pleasingly demonstrates our ability to execute in a competitive market".
Mr Dynon said following the acquisition of Marketown, Sunsuper's portfolio is now "well positioned" and consists of more than eight commercial assets.
Sunsuper's manager private markets, Michael Weaver, said Marketown is the first direct retail acquisition for Sunsuper and it "complements our existing portfolio, which includes the interest we acquired in Australian Technology Park, Sydney in 2015".
"Although we have considered such opportunities in the past, Marketown is the first asset to deliver on the right price, scale, tenant mix, leasing and development upside," Mr Weaver said.
"Through further development, an asset such as Marketown has the ability to maintain its relevance within Sunsuper's Property portfolio as our funds under management continues to grow."
According to AMP, Marketown is well positioned to benefit from new transport infrastructure and a university hub. With the majority of the income stream secured by highly rated covenants, the centre also has potential for future repositioning and development.Â
As part of the acquisition, AMP Capital has taken over the management of the shopping centre from Knight Frank, which means the Marketown Centre Management team of four will become members of the AMP Capital team.